European Union

ECB’s inflation-fighting hose may have a blockage

20 Feb 2023

The central bank has hiked rates by 3 percentage points since July, pushing up corporate borrowing costs and squeezing demand for credit. Yet firms and households have longer-term debt than in the past. That means tighter monetary policy will take a while to cool the economy.

Hydrogen is elemental to U.S.-EU green compromise

10 Feb 2023

Joe Biden’s Inflation Reduction Act has raised fears of a transatlantic subsidy spat. The sustainably produced version of hydrogen may be a way to de-escalate tensions. Because it’s a potential jobs engine rather than a current one, both sides have scope for a face-saving deal.

China ban would slow, not halt, Western solar push

3 Feb 2023

Reacting to the chip war, Beijing may ban the export of technology for making solar panels, a $235 bln sector it currently dominates. Yet the West already has green energy know-how. Creating a rival industry without Chinese expertise may be slower and costlier but not impossible.

Italy may hold key to unlock EU green subsidies

1 Feb 2023

Europe’s response to the U.S. green-subsidy surge now hinges on tapping existing budgets, rather than new money. Ursula von der Leyen wants to channel unspent pandemic billions into tax credits and tweak state aid. Italy’s Giorgia Meloni may be the one to broker a deal.

Euro zone can afford to keep fiscal taps running

31 Jan 2023

The bloc’s governments pumped up spending by 3.75% of GDP over the past two years to cushion the blow of Covid-19 and higher energy prices. Now they are closing the spigots. That’s a mistake. Manageable debt costs leave room to support growth – and help the ECB fight inflation.

European gas savings success hides darker reality

27 Jan 2023

Spurred by soaring prices, the continent used 12% less of the fossil fuel in 2022. Despite a push to conserve energy, much of the drop was due to companies switching to other pollutants or shutting plants. Gas-hungry sectors like chemicals and steel face a protracted struggle.

EU debt fears hinder U.S. green subsidies riposte

24 Jan 2023

Ursula von der Leyen has pledged a European response to protectionist U.S. energy handouts. The European Commission president can improve permitting speed and offer token subsidies. But her best weapon, a permanent form of the EU-wide pandemic bond-sale programme, is far off.

UK has wrong approach to EU-style strike limits

16 Jan 2023

British PM Rishi Sunak wants to force minimum service levels during public sector strikes, as exist in the rest of Europe. But the plan is too broad and coercive, looking like a knee-jerk reaction to the current unrest. It needs to be better thought-out, in a pacified atmosphere.

The fog in the English Channel is clearing a bit

16 Jan 2023

Britain won’t rejoin the EU soon, despite voters’ regrets over Brexit. But if the two sides resolve a Northern Ireland dispute there could be progress on topics such as climate, foreign policy and financial services. Much may have to wait for a new UK government, says Hugo Dixon.

Global energy prices face a turbulent 2023

12 Jan 2023

The cost of natural gas has halved from a peak last year thanks to warmer weather and bulky European stores. In this Viewsroom podcast, Breakingviews columnists discuss why it’s too early for companies and households to rule out further supply shocks and price volatility.

Cheaper gas is temporary salve for Europe Inc

9 Jan 2023

Warm winter days and enough reserves to offset Russian imports have halved the fuel’s cost. Yet Europe’s energy security also hinges on abundant liquefied natural gas purchases. As China’s fuel-guzzling economy reopens post-Covid, industrial giants like BASF may still suffer.

European inflation control is a double-edged sword

6 Jan 2023

Prices in Spain or France have risen less than in other big euro zone economies. One reason is lower dependence on Russian energy, but government price controls also helped smooth the shock. The risk is that suppressed inflation will catch up after the crisis subsides.

EU is stuck playing catch-up with Amazon and Apple

5 Jan 2023

Antitrust tsar Margrethe Vestager wrung concessions from the $880 bln e-commerce giant, while the iPhone maker could open to third-party app stores. That sounds like progress, but the giants could have other tricks up their sleeves. Enforcers will be left racing to keep up.

Economic chaos will break Orbán’s strongman spirit

20 Dec 2022

The Hungarian leader needs EU funds to prop up his country’s struggling economy. With inflation at 20% and the forint in free fall, social unrest is brewing. Backing down on civil rights restrictions and tackling corruption would be a small price to pay for the EU’s support.

Capital Calls: Satellites deal, EU gas price cap

16 Dec 2022

Concise views on global finance: Private equity firm Advent is paying a 129% premium for Maxar, indicating that the volatile, costly satellite construction business could soar away from public markets; the EU is edging towards a controversial cap for gas future contracts.

EU angst over “Buy American” reopens old wounds

14 Dec 2022

European policymakers are in a tizzy over local subsidies in President Joe Biden’s Inflation Reduction Act. Technical tweaks may level the playing field a bit. Even so, the bill rekindles long-running disputes over who picks winners and losers in the EU – and who should pay.

Capital Calls: Rio Tinto, Grocery delivery M&A

9 Dec 2022

Concise views on global finance: After a shambolic process, the $118 bln miner has succeeded in buying out the 49% of Turquoise Hill Resources it doesn’t own; Turkish grocery delivery player Getir gobbles up German rival Gorillas for $1.2 bln.

Inflation confusion increases odds of ECB mistake

30 Nov 2022

Euro zone prices rose a less-than-expected 10% in November, yet remained stubbornly high after stripping out fuel. That leaves central bankers in a pickle. To burnish their hawkish credentials with a sceptical market, they may keep tightening policy even as the economy falters.

EU makes partial retreat in clearing crusade

30 Nov 2022

Brussels may make banks clear some euro swaps on the continent, rather than stop them using venues like London altogether. The move avoids the disruption of a blanket ban, but would still push up costs. Clearing risks are best tackled through closer regulatory cooperation.

UK and EU’s new goodwill could be significant

23 Nov 2022

British PM Rishi Sunak wants to improve trade relations with the EU. Progress will only be piecemeal and slow, even if the two sides agree on how to implement their 2019 deal on Ireland. In the meantime small deals are possible, and they could normalise the path to closer ties.